European Session – Euro hits new 2 ½ year high, dollar rises after US jobless claims data
March 13, 2014 2:35 pm
The dollar was broadly weaker until US data on jobless claims and retail sales gave it a small boost.
During the European session the euro hit a new 2-1/2-year high against the dollar, buoyed by comments from ECB Governing Council member Jens Weidmann. He said that the ECB’s accommodative monetary policy in the Eurozone was appropriate, but that low interest rates “shouldn’t be a permanent condition.”
The euro overall is drawing strength from the ECB’s inaction at its latest policy meeting when it refrained from taking measures to counter low inflation.
A number of mixed Eurozone releases, including firmer French CPI and much stronger than forecast Spanish retail sales, had little impact on the euro as Weidmann’s comments overshadowed the data. After hitting a high of 1.3966 the euro ended the Europe session at 1.3893 with a 0.27% gain versus the dollar.
Sterling pushed higher against the dollar in the absence of UK data, peaking at 1.6716, recovering most of the losses made since its big tumble on Monday. It finished the European session up 0.20% at 1.67002
The dollar rebounded from a 102.40 session low to rise to 102.79 after the US data. It finished the European session with a 0.08% gain at 102.63.
Initial jobless claims fell 9,000 to a 3-month low of 315,000 in the week ending March 8. Expectations were for claims to rise to 330,000 from the previously reported number that was revised up to 324,000 from 323,000.
The jobs data overshadowed the retail sales data, which although rose above expectations by 0.3% in February, the January numbers were revised down 0.6%. This could affect first quarter spending numbers.
Stronger US data makes it easier for the Fed to make its decision on tapering. Meanwhile, the main driver for the dollar will be next week’s Fed policy announcement. It will be Janet Yellen’s first monetary policy meeting as Chair of the Fed.
The dollar was broadly weaker until US data on jobless claims and retail sales gave it a small boost.
During the European session the euro hit a new 2-1/2-year high against the dollar, buoyed by comments from ECB Governing Council member Jens Weidmann. He said that the ECB’s accommodative monetary policy in the Eurozone was appropriate, but that low interest rates “shouldn’t be a permanent condition.”
The euro overall is drawing strength from the ECB’s inaction at its latest policy meeting when it refrained from taking measures to counter low inflation.
A number of mixed Eurozone releases, including firmer French CPI and much stronger than forecast Spanish retail sales, had little impact on the euro as Weidmann’s comments overshadowed the data. After hitting a high of 1.3966 the euro ended the Europe session at 1.3893 with a 0.27% gain versus the dollar.
Sterling pushed higher against the dollar in the absence of UK data, peaking at 1.6716, recovering most of the losses made since its big tumble on Monday. It finished the European session up 0.20% at 1.67002
The dollar rebounded from a 102.40 session low to rise to 102.79 after the US data. It finished the European session with a 0.08% gain at 102.63.
Initial jobless claims fell 9,000 to a 3-month low of 315,000 in the week ending March 8. Expectations were for claims to rise to 330,000 from the previously reported number that was revised up to 324,000 from 323,000.
The jobs data overshadowed the retail sales data, which although rose above expectations by 0.3% in February, the January numbers were revised down 0.6%. This could affect first quarter spending numbers.
Stronger US data makes it easier for the Fed to make its decision on tapering. Meanwhile, the main driver for the dollar will be next week’s Fed policy announcement. It will be Janet Yellen’s first monetary policy meeting as Chair of the Fed.
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